Apple Could Beat Bitcoin Out Of The Retail Market

Apple's cut Bitcoins out of the App Store, but that's only a start. Next step: Unleash the iBeacons.

Bitcoin is winning over some retailers for its cheaper transaction fees and digital access, but it hasn’t permeated in-store purchases on a grand scale and might run into an unlikely contender: Apple. With its in-shop iBeacon platform, Apple could easily out-convenience Bitcoin and leverage its massive infrastructure to lure retailers away from the cryptocurrency market.

Apple’s anti-Bitcoin strategy is taking shape: Apple recently strong-armed the messaging app Gliph into eliminating Bitcoin sending on its iOS app, which follows Apple’s policy to oust the digital wallet apps Coinbase (back in November) and Blockchain (in 2012) from the Apple store, citing vague violations of its Terms of Service. Apple doesn’t want Bitcoin purchases happening on its servers.

Which is where Coinpunk comes in, an open source Bitcoin wallet that allows you to keep your wallet on your own server. Current Bitcoin wallets like Coinbase hosts wallets them on their servers, a dependency which Coinpunk creator Kyle Drake says makes them more akin to bank accounts. Using Coinpunk’s mobile web interface, even iPhone users can access their wallet and use a QR code scanner, which is the preferred way to enact Bitcoin transactions. With Coinpunk, Drake is hoping that privacy, safety, and simplicity will win people over from the transaction fee-heavy current online market and into the privacy-friendly world of Bitcoin purchasing.

But you'll have to pry them away from their iPhones. Apple’s betting big on another technology to facilitate the retail experience: iBeacons, which Apple’s been inadvertently preparing for since equipping Bluetooth Low-Energy (BLE) in iPhones since the 4S, amounting to about 200 million devices worldwide. BLE allows phones to talk to iBeacons (and vice versa) quickly and energy-cheaply, facilitating those fancy in-store apps promised in Macy’s and the Apple Stores that point out deals and, in the future, will likely allow on-the-spot purchases. If Apple wanted to keep Bitcoin out of these stores, they could mimic their App Store policy and require iBeacon users to similarly exclude Bitcoin purchases.

Combined with the iTunes media marketplace and its Passbook app, local purchases via iBeacons are setting iOS devices up to be central purchasing hubs with all your credit card and financial data keyed in. Tim Cook said last July that there are over 575 million active iTunes accounts, which dwarfs PayPal’s 110 million active accounts. If (or when) Apple decides to open its iTunes store into other markets, it already has the brand trust and device saturation to mainline purchases within its network.

Bitcoin’s decentralized freedom comes at a price: trust. Banks have the ability to sometimes recall fraudulent purchases or withdrawals, but Bitcoin’s exchanges are intentionally irreversible. SpendBitcoin’s list of places that directly accept Bitcoin has a front-and-center disclaimer stating: "All of these sites are listed by the site owners. We have not vetted them. Please search and ensure they have a good reputation before sending bitcoins to them."

Bitcoin’s first Black Friday had just over 400 retailers participating in special deals. As TechCrunch points out, there’s no reason for big-name outlets like Google, Amazon, and eBay to participate since they have their own digital wallet services (Google Wallet, PayPal, and Amazon One-Click). While Google Wallet is streamlined through Android devices, Apple’s still got the in-person retail hook with iBeacon. If it can keep Bitcoin out of its markets, Apple's got the best shot of keeping American retail safely within the iOS family.

[Image: Flickr user Nicki Mannix]

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  • lokitoki

    price for the worst invention in the last years. bitcoin. another unsustainable thing that nobody needs in these days

  • Glennsage

    I was just going to change from my Windows 8 phone (sucks) back to the iPhone, but now that they are actively trying to prevent BitCoin from taking hold, I'm going to probably look at Andriod. I am a huge proponent of capitalism, but I don't like companies trying to control things and keep people within their ecosystems.

  • Elizabeth Lewis

    Yes, a pretty shallow article trying to compare apples and oranges. Apple having the equivalent of Google Wallet has nothing to do with dampening broader based viability and acceptance of crypto currencies moving into the future. Fiat currencies, such as the dollar, where trillions of unbacked dollars are being so disasterously churned out by the insane Fed Reserve, while the Chinese just ceased using the the dollar in trading with the EU. This spells disaster and a sure fall for this type of mismanaged luchre!! Let's just say the dollar becomes almost worthless, almost overnight? Where are people going to turn? They're going to turn to what's there already poised to go. The cryptocurrencies!! Were going to need something to engage commerce. What kind of great faith do people have to have to jump off a sinking ship and grab the nearest thing floating to stay alive?

  • Joseph Ali

    Not sure how you can compare this iBeacon crap with Bitcoin. You misunderstand the concept behind Bitcoin.

  • Niko Lowry

    You really don't get the point of Bitcoin, do you? This isn't about a marketing gimmick or its retail market penetration(not yet, but soon).

    It and other decentralized currencies have the potential to change the world. People first need to grasp the concept that debt-free fiat money is a far better alternative to debt-based fiat money.

    And digital currencies hitting mainstream will just require some breakthrough services/products. Whenever the cryptocurrency equivalent to square is developed, is when you'll start seeing retail market penetration.

    You also don't think some nifty developers will be able to piggyback onto BLE and NFC, thus making it cross platform? They already do it with Pebble smartwatches.


    TLDR v: I usually like fastco, but this was poorly written with the author not fully grasping the subject.

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